Reliance Industries plans to invest $75 billion in renewables infrastructure could transform India into a hydrogen hub. There is speculation that the strategy entails transforming all clean power into hydrogen. This is one of the largest endorsements in the next-generation fuel.
Gagan Sidhu, director at the Centre for Energy Finance at CEEW, believes Reliance is preparing itself to capture the entire value chain of the green hydrogen economy. Green hydrogen is made from water and clean electricity. It is regarded as crucial for the world’s emissions reduction goals.
In August 2021, Prime Minister Narendra Modi committed India to a National Hydrogen Mission to invigorate the country’s efforts in climate change mitigation. Modi wants India to become a major global hub for green hydrogen production and export. As such, India has set targets of 175GW renewable energy generation by 2022; 450GW by 2030; and complete energy independence by 2047.
Besides Reliance Industries, Adani Enterprises Ltd, NTPC Ltd and Indian Oil Corp have also highlighted plans for green hydrogen. Analysts say India is dependent on these big businesses to lead the way. Mukesh Ambani, in 2021, vowed to produce green hydrogen at $1 per kilogram, a more than 60% reduction from today’s costs. He said Reliance will aggressively pursue this target and achieve it well before the turn of this decade.
Debasish Mishra, a partner at Deloitte Touche Tohmatsu, says reaching a $1 price point will require a dramatic drop in the cost of electrolyzers – the equipment needed to make green hydrogen. “A capacity utilization of more than 80% will be required, and that should be powered by constant energy supplies at less than 3 cents per kilowatt-hour,” he said. “To achieve around-the-clock supplies, supplemental forms of energy such as storage or hydropower will be needed, and that can take the cost beyond the desired levels.”
R Ramachandran, a former director for refineries at Bharat Petroleum Corp, said that if Reliance succeeds, then there is good opportunity. “If it doesn’t, then there may be a need for some government subsidies or other forms of official support.”
Meanwhile, the Power Minister Raj Kumar Singh on Thursday said India plans to unveil its first green hydrogen policy in about 10 days. The government has laid out incentives to draw investment in the sector. “The nation wants to offer free transmission of clean power from one province to another by making hydrogen, and make land available for building renewable energy projects as well as facilities to store green ammonia,” Singh said.
Reliance plans to produce 100 gigawatts of renewable energy, a fifth of the nation’s target for non-fossil capacity by the end of the decade. Its looking for sites in Gujarat and has made a request to the state government for 450,000 acres in Kutch.